Based on the inflation measure provided by the Tax Cuts and Jobs Act and Consumer Price Index for the 12-month period ending August 31, 2019, Thomson Reuters Checkpoint has released their projected inflation-adjusted Estate, Gift, Generation-skipping Transfer Tax, and other exclusion amounts for 2020, as follows:
- The unified estate and gift tax exclusion amount (gift and estate tax exemptions) for gifts made and decedents dying in 2020 will be $11,580,000 (up from $11,400,000 in 2019).
- The GST tax exemption for transfers made in 2020 will be $11,580,000 (up from $11,400,000 in 2019).
- The gift tax annual exclusion amount for gifts made in 2020 will be $15,000 (the same amount as for gifts made in 2019 and 2018).
- The annual exclusion for gifts to noncitizen spouses in 2020 will be $157,000 (up from $155,000 in 2019).
- The special use valuation reduction limit for estates of decedents dying in 2020 will be $1,180,000 (up from $1,160,000 for 2019).
- The portion of the estate tax that may be deferred on farm or closely held businesses at an interest rate of 2% per year, after the applicable exclusion amount is applied, will be $1,570,000 (up from $1,550,000 for 2019).
- The foreign gift reporting threshold for gifts from a nonresident alien or foreign estate to a U.S. person (other than an exempt Code Section 501(c) organization) will be $100,000; the foreign gift reporting threshold for gifts from foreign corporations and foreign partnerships to a U.S. person (other than an exempt Code Section 501(c) organization) will be $16,649 in 2020 (up from $16,388 for 2019).
Remember that Washington has an estate tax threshold of only $2,193,000. This amount is considerably lower than the Federal exemption. Therefore in Washington it is important to make estate tax planning part of your estate plan. We have helped clients save millions in estate taxes. Contact us today to schedule a meeting to see how we can help.